Trudeau says U.S. tariffs on Canada will be paused for 30 days

UPDATE 2:45 p.m.

U.S. President Donald Trump has agreed not to impose tariffs on Canada and Mexico for another month, pulling back from a plan that would have tipped North America into a trade war on Tuesday.

Prime Minister Justin Trudeau spoke with Trump twice on Monday, their first discussions since the president took over the White House on Jan. 20. After what Trudeau described on social media as a "good call" in the afternoon, the two leaders agreed to pause tariffs for at least 30 days.

Trudeau released a statement on X that outlined the broad strokes of the $1.3-billion border plan his government had announced in December, adding that "nearly 10,000 front line personnel are and will be working to protect the border."

That mirrors the number of troops Mexican President Claudia Sheinbaum pledged to send to the U.S. border on Monday morning when she announced that she had secured a deal with Trump to delay the tariffs on her country by one month.

Trump signed a pair of executive orders on Saturday that laid out a plan to impose 25 per cent across-the-board tariffs on Mexico and 25 per cent tariffs on most Canadian goods, with a lower 10 per cent tariff on Canadian energy.

The executive orders say the levies are a response to illegal immigration and drug smuggling, and use the International Emergency Economic Powers Act to declare an economic emergency that allows Trump to bypass Congress.

The order related to Canada says Mexican cartels are operating in the country and claims the modest amount of fentanyl intercepted at the northern border would be enough to kill "9.5 million Americans."

Trudeau said Monday that Canada will list cartels as terrorist entities.

"I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million," he said on X.

Canada plans to launch a joint strike force with the U.S. to combat organized crime, fentanyl trafficking and money laundering, and will appoint a "fentanyl czar" — though Trudeau gave no indication of what that job would entail.

The prime minister did not take questions from reporters on Monday.

Trump declared victory in a post on Truth Social, saying Canada agreed to "finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country, killing hundreds of thousands of Americans."

But his message ends with a warning that tariffs are not off the table.

"I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured," Trump wrote, finishing with "FAIRNESS FOR ALL."

The 30-day pause does mean that Canada's counter-tariffs are also on hold. Several provinces were scrambling late in the day to reverse plans to implement non-tariff measures, such as barring the sale of American liquor and removing all U.S. alcohol.

Ottawa's retaliation plan was set to begin with an initial 25 per cent tariff on $30 billion in U.S. goods on Tuesday, with tariffs on another $125 billion worth of goods three weeks later.

The late-day news of a pause came after markets closed after a difficult Monday. Canada's main stock index, the S&P/TSX composite, was down nearly 300 points at the closing bell, while the loonie fell to its lowest level in more than two decades.

It also came after another day of shifting rhetoric from the White House.

Trump's stated rationale for the tariffs — the need to end the flow of drugs and migrants into the U.S. — is tied to the emergency order he signed, but he has also said he wants to end the U.S. trade deficit with Canada.

Between calls with Trudeau on Monday, Trump lamented to reporters in the Oval Office that Canada has been "very tough to deal with" and "very unfair."

When asked whether there was anything Trudeau could offer him to get him to back off the threat, Trump went back to another now-familiar line.

"What I'd like to see? Canada become our 51st state," he said, adding "we don't need them for anything."

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UPDATE 1:45 p.m.

Prime Minister Justin Trudeau says "proposed tariffs" between Canada and the United States will be paused for at least 30 days while the countries work together on the border.

The statement on X came after Trudeau spoke with President Donald Trump by phone twice Monday.

"I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl," said Trudeau

"Nearly 10,000 frontline personnel are and will be working on protecting the border."

Canada will also be appointing a Fentanyl Czar, will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.

"I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million," Trudeau said.

Trudeau says the pause will last at least a month "while we work together."

The news comes after Mexico struck a similar deal with Trump this morning.

Trump signed executive orders on Saturday that laid out a plan to impose 25 per cent tariffs on Canada and Mexico starting on Tuesday.

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ORIGINAL 11:50 a.m.

U.S. President Donald Trump said Monday he thinks he'll have another "very good conversation" with Prime Minister Justin Trudeau in the afternoon, when the two leaders are set to speak about the impending trade war.

He also said Canada is "very tough" to deal with and offered no suggestion he will back away from his plan to impose punishing tariffs on Tuesday.

Trump spoke to reporters in the Oval Office Monday after striking a deal with his Mexican counterpart to delay the imposition of 25 per cent tariffs on that country.

His comments suggested the goalposts are continuing to shift for Canada. Trump's stated rationale for the tariffs — which would be 10 per cent on energy and 25 per cent on everything else — is the need to exert pressure on Canada to stop the flow of illegal drugs and migrants into the U.S.

But Trump also has said Canada can avoid the tariffs if it becomes a state, and has suggested he would use "economic force" to make that happen. He's also cited the U.S. trade deficit with Canada, which is almost entirely based on Canadian oil and gas exports to the U.S.

"What I'd like to see, Canada become our 51st state," he said, adding "we don't need them for anything."

On Monday he raised new grievances about the financial sector and claimed that Canada is unfair to the U.S.

"We're not treated well by Canada, and we have to be treated well," he said, adding he had a number of questions for Trudeau when they spoke Monday morning, including why American banks aren't operating in Canada.

"I think we'll win most of the subjects, but for some reason a lot of things have been very unfair with Canada."

More than a dozen U.S. banks have a presence in Canada, including Citibank, J.P. Morgan and Comerica.

On Saturday, Trump signed executive orders that laid out a plan to hit Canada and Mexico with tariffs on Tuesday. He also added another 10 per cent tariff on Chinese goods.

On Monday morning, Mexican President Claudia Sheinbaum said that she's agreed to send 10,000 troops to the U.S. border to combat drug trafficking. Mexico first sent troops to its northern border in 2019, citing pressure from the U.S. to curb migration.

Trump said on Truth Social that after a "very friendly conversation" with Sheinbaum, he's agreed to pause the imposition of tariffs on Mexico for one month to allow for negotiations.

"I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a 'deal' between our two Countries," Trump said.

Trudeau said on Saturday that he had been trying to speak directly with Trump since he took over the White House on Jan. 20 but hadn't been able to do so.

Trump relied upon the International Emergency Economic Powers Act to declare an economic emergency that allowed him to bypass Congress and impose the tariffs on his own.

The executive orders say the levies are a response to illegal immigration and drug smuggling. The order related to Canada says Mexican cartels are operating in the country and claims the modest amount of fentanyl intercepted at the northern border would be enough to kill "9.5 million Americans."

Trump also has said repeatedly he thinks tariffs are "beautiful" and claims they can make the U.S. wealthier, despite the short-term pain for businesses and consumers.

The move sparked concern and condemnation from American business and labour groups, including the National Association of Homebuilders, the United Steelworkers International and the U.S. Chamber of Commerce, among others.

"The imposition of tariffs under IEEPA is unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains," John Murphy, the chamber's senior vice-president and head of international, said in a Saturday statement.

Both Canada and Mexico promised to strike back with counter-tariffs over the weekend.

Ottawa's counter-tariff plan would begin on Tuesday with 25 per cent tariffs on $30 billion in goods originating in the U.S.

In three weeks, after consulting with industry, the federal government plans to impose tariffs on another $125 billion in U.S. goods.

Trudeau said additional non-tariff measures are being discussed by the federal and provincial governments, including some related to critical minerals, energy and procurement.

It is not clear what, if anything, Canada could promise to do on its border to convince Trump to reverse course.

Ottawa laid out a $1.3-billion border plan in December that will add personnel, helicopters, drones, drug-sniffing dogs and surveillance towers to the border.

Trudeau met with opposition leaders on Sunday to discuss the Canadian response to tariffs, and Green Party Leader Elizabeth May said Trudeau told them it's "increasingly clear" nothing more Canada does on the border would make a difference.

She said Trudeau told them Trump's tariff policy "was not really about fentanyl. It was about Canada and our sovereignty."

Premiers have laid out plans for their own countermeasures. Several provinces have pledged to stop buying U.S. alcohol and to remove it from the shelves of provincial liquor stores, while others including Ontario will bar American companies from provincial contracts.

Conservative Leader Pierre Poilievre also called for the government to send Canadian Armed Forces troops and helicopters to the border.

In a social media post, Poilievre said Canada should also add thousands of border agents and "extend CBSA powers along the entire border, not just crossings."